Exhibit 99.1

 

PolarityTE Reports Third Quarter 2020 Results

SALT LAKE CITY, November 9, 2020 – PolarityTE, Inc. (Nasdaq: PTE), a biotechnology company developing regenerative tissue products and biomaterials, today reported financial results for the third calendar quarter of 2020. PolarityTE will host a conference call and webcast today, November 9, 2020 at 8:00 a.m. ET.

Highlights

● Total revenues were $3.34 million in Q3:20 compared to $1.40 million in Q3:19

● SkinTE revenues were $1.16 million in Q3:20 compared to $0.84 million in Q3:19

● Contract services revenues were $2.18 million in Q3:20 and includes $1.75 million from COVID-19 testing

Financial Results for the Three Months Ended September 30, 2020

Total revenue for the three months ended September 30, 2020 was $3.34 million, of which $1.16 million was from sales of SkinTE and $2.18 million from PolarityTE’s contract service operations, which includes $1.75 million from COVID-19 testing services that the Company started providing at the end of May 2020.

Research and development expenses for the three months ended September 30, 2020 were approximately $2.70 million versus $2.96 million for the three months ended September 30, 2019. Research and development expenses for the three months ended September 30, 2020 included an expense of $0.39 million from stock-based compensation, which is a non-cash charge.

General and administrative expenses for the three months ended September 30, 2020 were $6.26 million versus $16.04 million for the three months ended September 30, 2019. General and administrative expenses for the three months ended September 30, 2020 included stock-based compensation expense of $1.65 million, which is a $3.17 million reduction in stock compensation expense compared to the three months ended September 30, 2019, due to restricted stock and option forfeitures related to the reductions in force taken during 2020. Other Q3 2020 general and administrative reductions from Q3 2019 include a $2.89 million decrease in severance expense, a $1.68 million reduction in legal, accounting, and consulting fees, and a $2.41 million reduction in compensation-related expenses.

Sales and marketing expenses for the three months ended September 30, 2020 were $1.61 million versus $4.99 million for the three months ended September 30, 2019. Sales and marketing expenses for the three months ended September 30, 2020 included a reduction in compensation and benefits costs of $0.81 million and reduction of marketing and consultant spending of $1.45 million compared to the three months ended September 30, 2019.

Net loss for the three months ended September 30, 2020 was $7.08 million compared with a net loss of $22.98 million for the three months ended September 30, 2019.

Cash and Liquidity as of September 30, 2020

As of September 30, 2020, our cash, cash equivalents and short-term investments balance was approximately $23.19 million, compared to cash and cash equivalents and short-term investments of $29.24 million at December 31, 2019.

Cash used in operating activities for the three-month period ended September 30, 2020 was approximately $6.76 million, or approximately $2.25 million per month on average, 43% lower than the $3.95 million monthly average in the three months ended September 30, 2019 and 42% lower than the $3.85 million monthly average in the three months ended June 30, 2020.

Conference Call and Webcast Details

The conference call can be accessed by calling 1-888-599-8688 (U.S. and Canada) or +44 (0)330 336 9104 (International), with confirmation code 496517 and referencing “PolarityTE Third Quarter 2020 Earnings Call.” A webcast of the conference call can be accessed by using the link below.

Earnings Call Webcast – CLICK HERE

A replay of the earnings conference call will be available for 30 days, beginning approximately one hour after the conclusion of the call and can be found by visiting PolarityTE’s website at https://www.polarityte.com/news-media/events or by clicking on the link above.

About PolarityTE®

PolarityTE is focused on transforming the lives of patients by discovering, designing and developing a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering and material sciences. Rather than manufacturing with synthetic and foreign materials within artificially engineered environments, PolarityTE manufactures products from the patient’s own tissue and uses the patient’s own body to support the regenerative process. From a small piece of healthy autologous tissue, the company creates an easily deployable, dynamic and self-propagating product designed to regenerate the target tissues. PolarityTE’s innovative methods are intended to promote and accelerate growth of the patient’s tissues to undergo a form of effective regenerative healing. Learn more at www.PolarityTE.com – Welcome to the Shift®.

Forward Looking Statements

Certain statements contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They are generally identified by words such as “believes,” “may,” “expects,” “anticipates,” “intend,” “plan,” “will,” “would,” “should” and similar expressions. Readers should not place undue reliance on such forward-looking statements, which are based upon the Company’s beliefs and assumptions as of the date of this release. The Company’s actual results could differ materially due to the impact of the COVID-19 pandemic and FDA regulatory matters, which cannot be predicted, and the risk factors and other items described in more detail in the “Risk Factors” section of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC (copies of which may be obtained at www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. The Company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law. Our actual results could differ materially due to risk factors and other items described in more detail in the “Risk Factors” section of the Company’s Annual Reports and other filings with the SEC (copies of which may be obtained at www.sec.gov).

POLARITYTE, the POLARITYTE logo, SKINTE, WHERE SELF REGENERATES SELF and WELCOME TO THE SHIFT are trademarks or registered trademarks of PolarityTE, Inc.

CONTACTS

Investors:

Rich Haerle

VP, Investor Relations

PolarityTE, Inc.

ir@PolarityTE.com

(385) 315-0697

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share amounts)

	September 30, 2020			December 31, 2019
ASSETS
Current assets
Cash and cash equivalents	$	23,186		$	10,218
Short-term investments		–			19,022
Accounts receivable, net		3,379			1,731
Inventory		907			252
Prepaid expenses and other current assets		1,596			1,264
Total current assets		29,068			32,487
Property and equipment, net		11,970			14,911
Operating lease right-of-use assets		3,110			4,590
Intangible assets, net		589			731
Goodwill		278			278
Other assets		472			602
TOTAL ASSETS	$	45,487		$	53,599
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	4,818		$	7,095
Other current liabilities		2,311			2,338
Current portion of long-term notes payable		1,887			528
Deferred revenue		25			98
Total current liabilities		9,041			10,059
Common stock warrant liability		7,233			–
Operating lease liabilities		1,817			2,994
Other long-term liabilities		872			1,630
Long-term notes payable		1,964			–
Total liabilities		20,927			14,683
Commitments and Contingencies (Note 14)
STOCKHOLDERS’ EQUITY
Preferred stock - 25,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2020 and December 31, 2019		–			–
Common stock – $.001 par value; 250,000,000 shares authorized; 38,912,005 and 27,374,653 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		39			27
Additional paid-in capital		492,676			474,174
Accumulated other comprehensive income		–			72
Accumulated deficit		(468,155	)		(435,357	)
Total stockholders’ equity		24,560			38,916
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	45,487		$	53,599

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share amounts)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Net revenues
Products	$	1,156		$	839		$	2,528		$	1,640
Services		2,181			556			4,008			2,546
Total net revenues		3,337			1,395			6,536			4,186
Cost of sales
Products		210			315			825			930
Services		1,142			330			1,925			1,087
Total cost of sales		1,352			645			2,750			2,017
Gross profit		1,985			750			3,786			2,169
Operating costs and expenses
Research and development		2,698			2,956			9,235			13,072
General and administrative		6,264			16,044			22,080			48,299
Sales and marketing		1,606			4,988			7,324			12,922
Restructuring and other charges		–			–			2,536			–
Total operating costs and expenses		10,568			23,988			41,175			74,293
Operating loss		(8,583	)		(23,238	)		(37,389	)		(72,124	)
Other income (expenses)
Change in fair value of common stock warrant liability		1,503			–			4,444			–
Interest (expense) income, net		(58	)		27			(135	)		126
Other income, net		57			228			282			650
Net loss	$	(7,081	)	$	(22,983	)	$	(32,798	)	$	(71,348	)
Net loss per share, basic and diluted	$	(0.18	)	$	(0.87	)	$	(0.89	)	$	(2.94	)
Weighted average shares outstanding, basic and diluted		38,761,141			26,405,307			36,743,864			24,273,774

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	For the Nine Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(32,798	)	$	(71,348	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation expense		5,963			23,932
Depreciation and amortization		2,337			2,243
Amortization of intangible assets		142			146
Amortization of debt discount		17			40
Change in fair value of common stock warrant liability		(4,444	)		–
Change in fair value of contingent consideration		–			(48	)
Loss on abandonment and disposal of property and equipment		1,566			265
Other non-cash adjustments		(21	)		3
Changes in operating assets and liabilities:
Accounts receivable		(1,648	)		(881	)
Inventory		(655	)		(10	)
Prepaid expenses and other current assets		(332	)		126
Operating lease right-of-use assets		1,348			1,214
Other assets		130			25
Accounts payable and accrued expenses		(2,349	)		4,095
Other current liabilities		–			155
Deferred revenue		(73	)		(36	)
Operating lease liabilities		(1,353	)		(1,142	)
Other long-term liabilities		–			571
Net cash used in operating activities		(32,170	)		(40,650	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(1,225	)		(2,386	)
Purchase of available-for-sale securities		(14,144	)		(29,002	)
Proceeds from maturities of available-for-sale securities		16,945			14,636
Proceeds from sale of available-for-sale securities		16,171			1,877
Net cash provided by (used in) investing activities		17,747			(14,875	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from the sale of common stock and warrants		24,276			27,948
Proceeds from stock options exercised		31			529
Proceeds from ESPP purchase		40			35
Cash paid for tax withholdings related to net share settlement		(114	)		(679	)
Payment of contingent consideration liability		–			(109	)
Principal payments on financing leases		(376	)		(336	)
Proceeds from term note payable and financing arrangements		4,630			–
Principal payments on term note payable and financing arrangements		(1,096	)		(263	)
Net cash provided by financing activities		27,391			27,125
Net increase (decrease) in cash and cash equivalents		12,968			(28,400	)
Cash and cash equivalents - beginning of period		10,218			55,673
Cash and cash equivalents - end of period	$	23,186		$	27,273
Non-cash investing and financing activities:
Unpaid liability for acquisition of property and equipment	$	10		$	249
Reclassification of stock-based compensation expense that was previously classified as a liability to paid-in capital	$	–		$	38
Unpaid tax liability related to net share settlement	$	5		$	–
Allocation of proceeds from sale of common stock and warrants to warrant liability	$	11,677		$	–
Property and equipment acquired through finance lease	$	–		$	2,341
Property and equipment acquired through financing arrangement	$	–		$	58